Oil markets sit in anticipation of an $80 a barrel for Brent when or if US President Trump re-imposes sanctions on Iran by the May 12 deadline.

Daman Investments Head of Asset Management Ali Adou told Bloomberg that lots of factors including an OPEC and Non-OPEC deal to cut 1.8 million oil barrels out of production till end 2018, have had a positive effect on oil prices.

This is despite the fact that U.S. oil production is expected to rise by another 125,000 bpd in May, compared to a month earlier, according to Oilprice.com, a prominent industry site.

“Oil prices rose sharply last week in anticipation of U.S. airstrikes in Syria and although Syria is only a marginal producer of oil, the fear was that the U.S. would get sucked into a broader conflict if it sparked retaliation from Russia or Iran,” said Oilprice.com.

“With only a narrow action taken by Washington, the threat of wider conflict abated. Oil fell to $71.87 (down 1% from Friday close, while WTI was down 0.85% to $66.82) on the news. But in early trading on Tuesday, oil held steady in anticipation of inventory drawdowns and comments from OPEC about a possible extension.”

Oil prices firmed up after Kuwait said that OPEC would consider extending the production cuts into 2019 as reported by Bloomberg.

OilPrice.com quoted the Wall Street Journal reporting that several European nations are considering support for new sanctions on Iran as a way to entice the U.S. to remain in the Iran nuclear deal.

Bloomberg reported last Saudi has been meeting with other OPEC nations, and key influencers to signal the Kingdom’s desire to move the Brent crude price up into the $80/bbl range. That would equate to a WTI price per barrel of about $75.

2-The global oil market is nearing balance – The International Energy Agency (IEA) announced on April 12 that crude oil inventories will fall below the rolling 5-year average in the next 2-3 months , signaling a re-balancing of global supply and demand, and the end of the supply glut that caused the price to collapse in 2014.

3-Global demand for crude oil remains strong – In its April forecast, the U.S. Energy Information Administration (EIA) raised its projection for global demand growth to 1.85 million bpd.

Hadi Khatib is a business editor with more than 15 years' experience delivering news and copy of relevance to a wide range of audiences. If newsworthy and actionable, you will find this editor interested in hearing about your sector developments and writing about it.

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